Workplace benefits trends continue to hold significant importance for the stability and health and financial security of employees. As reported in the fall 2010 issue of Club Director, employee benefits have weathered the economic storm with only modest reductions. The findings, based on the 8th annual Study of Employee Benefits Trends conducted by MetLife, indicated employees appear to value benefits more than ever and do not perceive them as a discretionary expense, particularly at times of higher risk and uncertainty.
Some of the benefits reported in the MetLife study show employee benefits drive job loyalty, foster health and wellness, improve productivity on the job, and may play a role in employee retention as the job market begins to recover.
A new survey by the Financial Services Roundtable and Employee Benefit Research Institute to gauge the public’s mood toward workplace benefits and insurance products indicates both high- and low-wage earners believe workplace benefits protect their financial well-being. Survey participants rated different benefits on a scale of 1 to 5 (5 being most important) in terms of providing financial protection. The findings show:
- 85 percent rated health insurance a 5
- 69 percent rated retirement savings a 5 (however, as workers age and income rose, the proportion jumped to 80 percent)
- 48 percent rated life insurance a 5 (but, increasing to 67 percent among workers earning less than $35,000)
- 39 percent rated long-term disability insurance a 5 (but, increasing to 52 percent of workers making less than $35,000) and 35 percent rated short-term disability insurance a 5 (again, rising to 45 percent among workers making less than $35,000).
President and CEO of the Employee Benefit Research Institute Dallas Salisbury commented on the findings at a recent symposium on the current state of employee benefits. Salisbury noted that there is a misconception that mainly the highest paid employees care most about certain benefit programs. “Yet in this survey, we found consistently, as with life insurance, the population of those rating a program a 5 was much higher among those at the bottom end of the income scale.”
Other findings from the survey indicate that employees realize that workplace benefits can serve as financial protection, especially in light of today’s health care reform, unemployment rates and a slow economy. Overall, 94 percent of workers indicated their employer offered benefits, with 79 percent being familiar with all of the benefit programs offered by their employer. Thirty-six percent indicated that the benefits and insurance offered by a company were the reason they took a job; 40 percent have stayed at a job because of the benefits and insurance; and, 10 percent left a job because of the employer-offered benefits and insurance.
The September 2010 survey included 501 men and 506 women 18 years and older, living in private households. The survey also uncovered some of the reasons why workers don’t enroll in workplace benefits programs or purchase insurance products:
- 32 percent obtain the offering outside the workplace
- 23 percent receive a better offer elsewhere
- 19 percent cannot afford the programs
- 9 percent haven’t gotten around to enrolling yet
- 5 percent didn’t understand the benefits program or how to enroll in it.
Emerging Strategies for Employers
New national reports by health care analysts indicate that employers are exploring new strategies to provide health care benefits that focus not only on costs, but value. According to George Stadtlander, executive vice president and chief managed care officer, Medical Mutual of Ohio, “Price is still tops in employers’ minds, so employers are looking at innovative strategies that the plan has in place to control or drive down costs while still delivering quality care.”
Among the strategies cited are transparency, evidence-based care, wellness and the plan’s ability to engage employees in programs such as disease management, which usually can lead to cost savings through improvement in member lifestyle and health choices.
Sophisticated technology that has the ability to integrate clinical and claims data is one way employers can be more aggressive in plan management. Employee wellness and health promotion plans are tools that can engage employees and help manage costs and delivery value. According to a recent Towers Watson study, 86 percent of employers plan to increase employee engagement around wellness, and 65 percent plan to increase incentives for employee participation in such programs.
“Health plans with a proven track record of engaging employees and influencing behavior will be in high demand,” says Julie Stone, senior consultant and practice leader at Towers Watson.
According to Towers Watson, employer health care costs for employees are projected to rise 8.2 percent (after plan changes), to an average annual cost of $10,730 in 2011. Buck Consultants, an HR and benefits consulting company, reports cost increases of 10.6 percent for HMOs, 11.6 percent for PPOs and 11.3 percent for high-deductible plans.
Club Employee Benefits Survey
Also in September, McGladrey polled its private club clients about their budget strategies for the upcoming year. The survey included questions about dues, menu prices, fees, pay rates and benefits. Not surprisingly, many clubs are holding off making benefit changes, with 85 percent of clubs responding that they were planning no increase in employee benefits. Ten percent planned additional reductions in benefit programs and five percent are planning increases in benefits.
With the lack of cost-containment measures in health care reform and additional administrative and tax issues associated with the new health care law, many clubs will be aggressively managing their total employee health costs. For more information about the Patient Protection and Affordable Care Act, please visit www.nationalclub.org.